Silicon
Valley Bank


Schedule to

Loan and Security Agreement


	
  Borrower:

  	
  Maxwell
  Technologies, Inc.

  
	
   
	
   

	
  Address:

  	
  9244
  Balboa Avenue

  
	
   
	
  San
  Diego, CA 92123

  
	
   
	
   

	
  Date:

  	
  February
  4,2004

  



This Schedule
forms an integral part of the Loan and Security Agreement between Silicon
Valley Bank and the above-borrower of even date.


	
  



  
	
   
	
   
	
   

	
  1.
	
  CREDIT LIMIT
	
   

	
   
	
  (Section
  1.1):
	
  An amount
  not to exceed the lesser of (i) $1,500,000
  at any one time outstanding (the “Maximum Credit Limit”), or (ii) 85% (the “Advance Rate”) of the amount of
  Borrower’s Eligible Accounts (as defined in Section 8 above); provided that
  the total outstanding Obligations under this Loan Agreement and under the
  Exim Agreement (as defined below) shall not at any time exceed $3,000,000 (the “Overall Credit Limit”).

	
   
	
   
	
   

	
   
	
   
	
  Silicon may,
  from time to time, modify the Advance Rate, in its good faith business
  judgment, upon notice to the Borrower, based on changes in collection
  experience with respect to Accounts or other issues or factors relating to
  the Accounts or other Collateral.

	
   
	
   
	
   

	
   
	
  Combined Sublimit:
	
  The total
  amount of Loans available hereunder which Borrower may use to obtain Cash
  Management Services and Letters of Credit (as the foregoing terms are defined
  herein) shall not exceed $500,000.

	
   
	
   
	
   

	
   
	
   
	
  Letter of Credit 

  Sublimit
	
   

	
   
	
   
	
  (Section
  1.6):
	
  $500,000.

	
   
	
   
	
   
	
   

	
   
	
   
	
  Cash Management
	
   

	
   
	
   
	
  Services and Reserves:
	
  Borrower may
  use up to $500,000 of Loans
  available hereunder for Silicon’s Cash Management Services (as defined
  below), including, merchant services, business credit card, ACH and other
  services identified in the cash management services agreement related to such
  service (the “Cash Management Services”). Silicon may, in its 




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  Silicon Valley Bank
	
  Schedule to Loan and Security Agreement
  

	
  



  
	
   
	
   
	
   
	
   

	
   
	
   
	
   
	
  sole
  discretion, reserve against Loans which would otherwise be available
  hereunder such sums as Silicon shall determine in its good faith business
  judgment in connection with the Cash Management Services, and Silicon may
  charge to Borrower’s Loan account, any amounts that may become due or owing
  to Silicon in connection with the Cash Management Services. Borrower agrees
  to execute and deliver to Silicon all standard form applications and
  agreements of Silicon in connection with the Cash Management Services, and,
  without limiting any of the terms of such applications and agreements,
  Borrower will pay all standard fees and charges of Silicon in connection with
  the Cash Management Services. The Cash Management Services shall terminate on
  the Maturity Date.

	
   
	
   
	
   
	
   

	
   
	
   
	
  Exim Agreement;

  Cross-Collateralization;

  Cross-Default:
	
  Silicon and
  the Borrower are parties to that certain Loan and Security Agreement (Exim
  Program) of even date (the “Exim Agreement”). Both this Agreement and the
  Exim Agreement shall continue in full force and effect, and all rights and
  remedies under this Agreement and the Exim Agreement are cumulative. The term
  “Obligations” as used in this Agreement and in the Exim Agreement shall
  include without limitation the obligation to pay when due all Loans made
  pursuant to this Agreement (the “Non-Exim Loans”) and all interest thereon
  and the obligation to pay when due all Loans made pursuant to the Exim
  Agreement (the “Exim Loans”) and all interest thereon. Without limiting the
  generality of the foregoing, all “Collateral” as defined in this Agreement
  and as defined in the Exim Agreement shall secure all Exim Loans and all
  Non-Exim Loans and all interest thereon, and all other Obligations. Any Event
  of Default under this Agreement shall also constitute an Event of Default
  under the Exim Agreement, and any Event of Default under the Exim Agreement
  shall also constitute an Event of Default under this Agreement. In the event
  Silicon assigns its rights under the Exim Agreement and/or under any Note evidencing
  Exim Loans and/or its rights under this Agreement and/or under any Note
  evidencing Non-Exim Loans, to any third party, including without limitation
  the Export-Import Bank of the United States (“Exim Bank”), whether before or
  after the occurrence of any Event of Default, Silicon shall have the right
  (but not any obligation), in its sole discretion, to allocate and apportion
  Collateral to the Agreement and/or Note assigned and to specify the
  priorities of the respective security interests in such Collateral between
  itself and the assignee, all without notice to or consent of the Borrower.

	
   
	
   
	
   
	
   

	
  



  



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  2.
	
  INTEREST.
	
   

	
   
	
   
	
   
	
   

	
   
	
   
	
  Interest Rate (Section 1.2):
	
  A rate equal
  to the “Prime Rate” in effect from time to time, plus 1.75% per annum, provided that the
  interest rate in effect on any day shall not be less than 5.75% per annum. Interest shall be
  calculated on the basis of a 360-day year for the actual number of days
  elapsed. As used in this Agreement, “Prime Rate” means the interest rate
  announced from time to time by Silicon as its “prime rate” (which is a base
  rate upon which other rates charged by Silicon are based, and it is not
  necessarily the best rate available at Silicon). The interest rate applicable
  to the Obligations shall change on each date there is a change in the Prime
  Rate.

	
   
	
   
	
   
	
   

	
   
	
   
	
  Minimum Monthly

  Interest (Section 1.2):
	
  $2,500 per
  month in the aggregate as between this Agreement and the Exim Agreement.

	
   
	
   
	
   
	
   

	
  



  
	
   
	
   
	
   
	
   

	
  3.
	
  FEES (Section 1.4):
	
   

	
   
	
   
	
   
	
   

	
   
	
   
	
  Loan Fee:
	
  $7,500,
  payable concurrently herewith.

	
   
	
   
	
   
	
   

	
   
	
   
	
  Collateral
  Monitoring Fee:
	
  $1,000, per
  month in the aggregate as between this Agreement and the Exim Agreement,
  payable in arrears (prorated for any partial month at the beginning and at
  termination of this Agreement).

	
   
	
   
	
   
	
   

	
   
	
   
	
  Unused Line
  Fee:
	
  In the
  event, in any calendar month (or portion thereof at the beginning and end of
  the term hereof), the average daily principal balance of the Loans
  outstanding during the month is less than the amount of the Maximum Credit
  Limit, Borrower shall pay Silicon an unused line fee in an amount equal to
  0.25% per annum on the difference between the amount of the Maximum Credit
  Limit and the average daily principal balance of the Loans outstanding during
  the month, computed on the basis of a 360-day year, which unused line fee
  shall be computed and paid monthly, in arrears, on the first day of the
  following month.

	
   
	
   
	
   
	
   

	
  



  
	
   
	
   
	
   
	
   

	
  4.
	
  MATURITY DATE
	
   

	
   
	
  (Section
  6.1):
	
  One year
  from the date of this Agreement.

	
   
	
   
	
   

	
  



  
	
   

	
  5.
	
  FINANCIAL COVENANTS
	
   

	
   
	
  (Section
  5.1):
	
  Maxwell
  Technologies, Inc. shall, on a consolidated basis, comply




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  Silicon Valley Bank
	
  Schedule to Loan and Security Agreement
  

	
  



  
	
   
	
   
	
   

	
   
	
   
	
  (Section
  5.1):
	
  with each of
  the following covenants. Compliance shall be determined as of the end of each
  month, except as otherwise specifically provided below:

				



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  Silicon Valley Bank
	
  Schedule to Loan and Security Agreement
  

	
  



  
	
   
	
   
	
   
	
   

	
   
	
   
	
  Minimum Tangible 
	
   

	
   
	
   
	
  Net Worth:
	
  Borrower
  shall maintain a Tangible Net Worth of not less than $15,000,000 plus (i) 50% of all
  consideration received after the date hereof for equity securities and
  subordinated debt of the Borrower, plus (ii) 50% of the Borrower’s net income
  in each fiscal quarter ending after the date hereof. Increases in the Minimum
  Tangible Net Worth Covenant based on consideration received for equity
  securities and subordinated debt of the Borrower shall be effective as of the
  end of the month in which such consideration is received, and shall continue
  effective thereafter. Increases in the Minimum Tangible Net Worth Covenant
  based on net income shall be effective on the last day of the fiscal quarter
  in which said net income is realized, and shall continue effective
  thereafter. In no event shall the Minimum Tangible Net Worth Covenant be
  decreased.

	
   
	
   
	
   
	
   

	
   
	
   
	
  Definitions.
	
  For purposes
  of the foregoing financial covenants, the following term shall have the
  following meaning:

	
   
	
   
	
   
	
   

	
   
	
   
	
   
	
  “Current
  assets”, “current liabilities” and “liabilities” shall have the meaning
  ascribed thereto by GAAP.

	
   
	
   
	
   
	
   

	
   
	
   
	
   
	
  “Tangible
  Net Worth” shall mean the excess of total assets less total liabilities,
  determined in accordance with GAAP, with the following adjustments:

	
   
	
   
	
   
	
   

	
   
	
   
	
   
	
   
	
  (A) there
  shall be excluded from assets: (i) notes, accounts receivable and other
  obligations owing to Borrower from its officers or other Affiliates, and (ii)
  all assets which would be classified as intangible assets under GAAP,
  including without limitation goodwill, licenses, patents, trademarks, trade
  names, copyrights, capitalized software and organizational costs, licenses
  and franchises, and (iii) minority investments in other Persons.

	
   
	
   
	
   
	
   
	
   

	
   
	
   
	
   
	
   
	
  (B) there
  shall be excluded from liabilities: all indebtedness which is subordinated to
  the Obligations under a subordination agreement in form specified by Silicon
  or by language in the instrument evidencing the indebtedness which Silicon
  agrees in writing is acceptable to Silicon in its good faith business
  judgment.

	
   
	
   
	
   
	
   
	
   

	
  



  



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  Silicon Valley Bank
	
  Schedule to Loan and Security Agreement
  

	 
	
  



  
	 
	
   
	
   
	
   
	
   

	 
	
  6.
	
  REPORTING.
	
   

	 
	
   
	
  (Section
  5.3):
	
   

	 
	
   
	
   
	
  Borrower
  shall provide Silicon with the following:

	 
	
   
	
   
	
   

	
   
	
   
	
   
	
   
	
  1.
	
  Transaction
  reports and schedules of collections, each week and at the time of each Loan
  request, on Silicon’s standard form

	
   
	
   
	
   
	
   
	
   
	
   

	
   
	
   
	
   
	
   
	
  2.
	
  Monthly accounts
  receivable agings (separate from the agings required by the Exim Agreement),
  aged by invoice date, within fifteen days after the end of each month.

	
   
	
   
	
   
	
   
	
   
	
   

	
   
	
   
	
   
	
   
	
  3.
	
  Monthly
  accounts payable agings (separate from the agings required by the Exim
  Agreement), aged by invoice date, and outstanding or held check registers, if
  any, within fifteen days after the end of each month.

	
   
	
   
	
   
	
   
	
   
	
   

	
   
	
   
	
   
	
   
	
  4.
	
  Monthly
  reconciliations of accounts receivable agings (aged by invoice date),
  transaction reports, and general ledger, within fifteen days after the end of
  each month.

	
   
	
   
	
   
	
   
	
   
	
   

	
   
	
   
	
   
	
   
	
  5.
	
  Monthly
  unaudited financial statements of Maxwell Technologies, Inc. (on a
  consolidated and consolidating basis), as soon as available, and in any event
  within thirty days after the end of each month.

	
   
	
   
	
   
	
   
	
   
	
   

	
   
	
   
	
   
	
   
	
  6.
	
  Monthly
  Compliance Certificates, within thirty days after the end of each month, in
  such form as Silicon shall reasonably specify, signed by the Chief Financial
  Officer of Borrower, certifying that as of the end of such month Borrower was
  in full compliance with all of the terms and conditions of this Agreement,
  and setting forth calculations showing compliance with the financial
  covenants set forth in this Agreement and such other information as Silicon
  shall reasonably request, including, without limitation, a statement that at
  the end of such month there were no held checks.

	
   
	
   
	
   
	
   
	
   
	
   

	
   
	
   
	
   
	
   
	
  7.
	
  Copies of
  all reports on Form 10-Q filed by Maxwell Technologies, Inc. with the
  Securities and Exchange Commission within 5 days after such filing.

	
   
	
   
	
   
	
   
	
   
	
   

	
   
	
   
	
   
	
   
	
  8.
	
  Annual
  operating budgets (including income statements, balance sheets and cash flow
  statements, by month) for the upcoming fiscal year of Borrower within thirty
  days

							



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  Silicon Valley Bank
	
  Schedule to Loan and Security Agreement
  

	
  



  
	
   
	
   
	
   
	
   

	
   
	
   
	
   
	
   
	
   
	
  prior to the
  end of each fiscal year of Borrower.

	
   
	
   
	
   
	
   
	
   
	
   

	
   
	
   
	
   
	
   
	
  9.
	
  Annual
  financial statements of Maxwell Technologies, Inc. (on a consolidated and
  consolidating basis), as soon as available, and in any event within 90 days
  following the end of Maxwell Technologies, Inc.’s fiscal year, certified by,
  and with an unqualified opinion of, independent certified public accountants
  acceptable to Silicon together with copies of all reports on Form 10-K filed
  by Maxwell Technologies, Inc. with the Securities and Exchange Commission.

	
   
	
   
	
   
	
   
	
   
	
   

	
  



  	
  



  	
  



  	
  



  
	
   

	
  7.
	
  BORROWER INFORMATION:
	
  Borrower
  represents and warrants that the information set forth in the Representations
  and Warranties of the Borrower dated December 4, 2003, previously submitted
  to Silicon (the “Representations”) is true and correct as of the date hereof.

	
   
	
   
	
   
	
   
	
   
	
   

	
  



  	
  



  	
  



  	
  



  
	
   
	
   
	
   
	
   
	
   
	
   

	
  8.
	
  ADDITIONAL PROVISIONS
	
   
	
   
	
   

	
   
	
   
	
   
	
   
	
   
	
   

	
   
	
   
	
   
	
  (1)
	
  Banking Relationship. Borrower shall at all
  times maintain its primary banking relationship with Silicon. Without
  limiting the generality of the foregoing, within sixty days of the date
  hereof and at all times thereafter, Borrower shall maintain not less than 85%
  of Maxwell Technologies, Inc.’s total cash and investments on deposit with
  Silicon. As to any Deposit Accounts and investment accounts maintained with
  another institution, if at any time Borrower fails to comply with the terms
  of the preceding sentence, Borrower shall cause such institution, within 10
  days after the date of such non-compliance, to enter into a control agreement
  in form acceptable to Silicon in its good faith business judgment in order to
  perfect Silicon’s first-priority security interest in said Deposit Accounts
  and investment accounts.

	
   
	
   
	
   
	
   
	
   

	
   
	
   
	
   
	
  (2)
	
  Subordination of Inside Debt. All present
  and future indebtedness of Borrower to its officers, directors and
  shareholders (“Inside Debt”) shall, at all times, be subordinated to the
  Obligations pursuant to a subordination agreement on Silicon’s standard form.
  Borrower represents and warrants that there is no Inside Debt presently
  outstanding, except for the following: NONE. Prior to incurring any Inside
  Debt in the 

							



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  Silicon Valley Bank
	
  Schedule to Loan and Security Agreement
  

	
  



  
	
   
	
   
	
   
	
   

	
   
	
   
	
   
	
   
	
  future, Borrower
  shall cause the person to whom such Inside Debt will be owed to execute and
  deliver to Silicon a subordination agreement on Silicon’s standard form.

	
   
	
   
	
   
	
   
	
   

	
   
	
   
	
   
	
  (3)
	
  Additional Condition Precedent. In addition
  to any other conditions precedent to funding set forth in this Agreement,
  prior to the funding of any Loans, Silicon shall have received information
  satisfactory to Silicon from Maxwell Europe’s (fka Maxwell Technologies, SA)
  lender, Cantonal Bank of Freiburg (“Cantonal Bank”), regarding its relationship
  with Maxwell Technologies, Inc. and Maxwell Europe. Borrower shall use its
  best efforts to cause Cantonal Bank to enter into an intercreditor agreement
  with Silicon, on Silicon’s standard form with such changes thereto as are
  acceptable to Silicon, regarding Cantonal Bank’s and Silicon’s relationships
  with Maxwell Technologies, Inc. and Maxwell Europe.

	
   
	
   
	
   
	
   
	
   

	
   
	
   
	
   
	
  (4)
	
  Restrictions on Transfers to Affiliates.
  Except for the Borrowers, Borrower covenants and agrees that while this
  Agreement is in effect, Borrower shall not transfer any assets or Collateral
  (beyond its historical normal course of business) to any Affiliate without
  the prior written consent of Silicon.

	
   
	
   
	
   
	
   
	
   

	
   
	
   
	
   
	
  (5)
	
  Initial Audit. An initial audit, referred to
  in Section 5.4 of this Agreement, shall be completed, with satisfactory
  results to Silicon, prior to funding hereunder.

	
   
	
   
	
   
	
   
	
   

	
   
	
   
	
   
	
  (6)
	
  Domestic Subsidiaries. Borrower represents
  and warrants to Silicon that each of Purepulse Technologies, Inc.
  (“Purepulse”) and I-Bus/Phoenix, Inc. (“I-Bus”) is a wholly owned subsidiary
  of Borrower and that each of Purepulse and I-Bus is inactive with little or
  no assets and will remain inactive with little or no assets during the term
  of this Agreement. Borrower covenants and agrees that while this Agreement is
  in effect, Borrower shall not transfer any assets or Collateral to Purepulse
  and/or I-Bus.




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  Silicon Valley Bank
	
  Schedule to Loan and Security Agreement
  

	
  



  
	
   
	
   
	
   
	
   

	
  Borrower:
	
   
	
  Silicon:
	
   
	
   

	
   
	
   
	
   
	
   
	
   

	
   
	
   
	
   
	
   
	
   

	
  MAXWELL
  TECHNOLOGIES, INC.
	
   
	
  SILICON
  VALLEY BANK
	
   
	
   

	
   
	
   
	
   
	
   
	
   

	
  By
	
   
	
  By
	
   
	
   

	
   
	
  



  	
   
	
   
	
  



  	
   
	
   

	
  President or Vice President
	
   
	
  Title
	
   
	
   

	
   
	
   
	
   
	
   
	
  



  	
   
	
   

	
   
	
   
	
   
	
   
	
   

	
  By
	
   
	
   
	
   
	
   

	
   
	
  



  	
   
	
   
	
   
	
   

	
  Secretary or Ass’t Secretary
	
   
	
   
	
   
	
   

										




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